1. Find his utility maximizing H and L. Assume he is not eligible for welfare.
2. Now assume he is eligible for welfare. Does he take welfare or work?
3. Assume he takes welfare and does not work. What is his reservation wage? He will not loose his welfare if he works.
4. Suppose he is working and receives no welfare, what is the minimum overtime pay needed for him to work 1 hour of overtime?
This question was asked on Apr 27, 2010.
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